World Energy Investment 2018 provides a critical benchmark for decision making by governments, the energy industry, and financial institutions to set policy frameworks, implement business strategies, finance new projects, and develop new technologies.
It highlights the ways in which investment decisions taken today are determining how energy supply and demand will unfold tomorrow. The report looks at critical questions that have shaped the energy industry, including: Which countries and policies attracted the most energy investment in 2017, and what fuels and technologies are growing fastest? Is energy investment sufficient and targeted appropriately to realise the world’s energy transition objectives? How are oil and gas companies responding to higher oil prices?
Are they changing their strategy decisions in order to ensure adequate supplies while minimising long-term risks? How is the business model for US shale evolving? Is the rapid growth of production in 2018 still largely based on continuous overspending or is the industry finally moving towards financial sustainability?
Are business models and financing approaches supporting a shift in power generation investments towards renewables? How are regulators around the world shaping enabling investments in power system networks and flexibility? What policy and market factors drive energy efficiency spending? What new approaches to financing are emerging for efficient goods and services? How are the sources of energy finance evolving? What roles are public financial institutions and utilities playing?
How are decision makers addressing investment risks in India and other emerging economies? What are governments and the energy sector spending on energy research and development? What are the main considerations facing investors in batteries and the electric vehicle value chain; carbon capture, utilisation and storage; and hydrogen?
The aim of World Energy Day, celebrated annually on 22 October, is to send a positive signal worldwide highlighting the importance of choices society makes regarding energy policy, production and the environment.
It was first proposed by Dr Harold Hyunsuk, who founded the World Energy Forum – a non-profit organisation affiliated with the United Nations – in 2008. One of the major discussions within the group, and one which remains a concern worldwide, is oil. Specifically, whether the world has exhausted its oil supply and what options we have for the future of energy.
How much oil is left?
In June, BP provided an intriguing update to its global oil reserves estimates in the company’s yearly review of energy statistics. It raised its reserve estimate by 1.1% to 1,687.9 billion barrels – just enough oil to last the world 53.3 years at the current production rates.
According to the Institute of Mechanical Engineers, there are 1.3 trillion barrels of proven oil reserve left in the world’s major fields, which at present rates of consumption should last 40 years.
However, the organisation also emphasises that by 2040, production levels may be down to 15 million barrels per day – just 20% of what we currently consume. By that time, it is probable that the world’s population will be double what it is today and much more industrialised, and therefore oil dependent.
What part do new technologies play?
There is likely to be more oil left in the tank beyond what BP estimates, however, according to oil companies.
A large portion of the growth in global oil reserves in the BP report comes from the United States. BP estimates that the US has 44.2 billion barrels of oil reserves, around 26% higher than it previously thought. The US Energy Information Administration, meanwhile, increased its estimate to 33.4 billion barrels of reserves – just 15% more than previously estimated.
But why is there a surge in oil reserves? Shale oil, an unconventional oil produced from shale rock fragments, is being discovered through horizontal drilling technology. And with the discovery of this method, it should boost gains in reserves over the next decade – stretching out BP’s 53.3 year estimate.
The challenge facing engineers extracting shale oil is that currently, it is so difficult to get at that it actually takes more energy to extract than it gives back in use. In shale formations, natural gas molecules are stuck to the rock and must be detached before they will flow to the surface – an intricate and expensive process.
The rising cost of oil has also forced governments and oil companies to exploit previously marginal sources of oil from difficult locations, such as the deep sea.
Since North Sea oil first became a source, 36 billion barrels have been extracted. Yet it is hampered by a worldwide shortage of essential equipment such as rigs and support vessels.
Where are the major oil reserves?
The largest remaining reserves are in Saudi Arabia, which has around 261.8 billion barrels, followed by Iraq, which has an estimated 112.5 billion. The United Arab Emirates has 97.8 billion and Kuwait has 96.5 billion, with the fifth largest reserve in Iran, which has around 89/7 billion barrels.
In comparison, the North Sea has around 4.9 billion barrels remaining – a fraction of the reserves in the Middle East. New discoveries are being made, however, and Brazil recently discovered a new field with an estimated five to eight billion barrels. Such finds are rare.
Have we gone past the point of maximum oil production?
There is a debate between “peak oil” theorists and oil companies surrounding Earth exhausting its supply of oil. What is clear is that oil is getting harder to extract, which is reflected in rising prices. A barrel worth $10 in 1998 now costs over $135.
The effects are wide-reaching, affecting road, aviation and shipping – and sending the commodity cost of staple foods, such as rice and wheat, soaring. The fuel used to harvest the food has doubled over the last 12 months.
In response to the rising costs and environmental concerns, scientists are looking further into new ways to create renewable energy without fossil fuels. Burning fossil fuels produces around 21.3 billion tonnes of carbon dioxide per year, and only half of that is absorbed by natural processes. The result is catastrophic, increasing global warming and causing the average surface temperature of the planet to rise.
Last year, the BBC reported that scientists discovered a new way to split hydrogen from water using rocks – a potentially new green energy source. More research is being done to expand the use of energy from sunlight, wind, tides, waves and geothermal heat to reduce reliance on fossil fuels.
Like every 5 March since 1998, this Tuesday marks the 2021 World Energy Efficiency Day. The initiative, which emerged in Austria during the First International Meeting on Energy Efficiency, aims to raise awareness of the need to reduce energy consumption through reasonable and sustainable energy use. In 2021, in the midst of the COVID-19 pandemic, it is more important than ever that we hold this World Energy Efficiency Day, as the fight against climate change and the health crisis require a shared roadmap.
Contrary to what many people think, improving energy efficiency does not mean compromising our comfort and quality of life by decreasing our energy use on a day-to-day basis. Nothing could be further from the truth. Enhancing energy efficiency is based on optimising production processes and energy consumption,using renewable energy sources instead of fossil fuels and promoting responsible consumption and recycling, among other things.
How can I promote energy efficiency in 2021?
What are LEED and BREEAM Energy Efficiency Certifications?
Aside from the actions we can take in our day-to-day lives, World Energy Efficiency Day is the perfect day to learn about LEED and BREEAM energy efficiency certifications. Both are systems designed to verify the sustainability and energy efficiency of buildings, and although they have many points in common, they differ in some respects.
Firstly, LEED (Leadership in Energy and Environmental Design) certification bases its evaluation on the analysis of six environmental impact categories.
A sustainable site
Water efficiency and reduction in water consumption
Energy efficiency and reduction in energy consumption
Recycled materials and natural resources
Indoor environmental quality
Innovation in design
LEED certification, which was developed in the United States, is also flexible enough to be applied to any type of construction, whether residential or commercial.
Meanwhile, BREEAM (Building Research Establishment Environmental Assessment Method) certification was developed in the United Kingdom and evaluates buildings in ten categories:
Health and wellbeing
Sustainable land use
Both methods serve to identify sustainable constructions which, following their assessment, are given a rating: Certified, Silver, Gold or Platinum in the case of LEED and Pass, Good, Very Good, Excellent or Outstanding when it comes to BREEAM.
The World Energy Outlook (WEO) is the gold standard of long-term energy analysis. The 2018 edition provides updated analysis to show what the latest data, technology trends and policy announcements might mean for the energy sector to 2040.
It also outlines an integrated way to meet multiple sustainable development goals: limiting the global temperature rise in line with the Paris Agreement, addressing air pollution, and ensuring universal access to energy. These points of orientation allow for rigorous thinking about the future against a backdrop of cost reductions in key clean energy technologies, the continued vitality of shale in the United States, and the fast-changing dynamics of energy investment. WEO 2018 includes a special focus on electricity. The future is electrifying, with low-carbon technologies on the rise and electricity demand set to grow at twice the pace of energy demand as a whole. But what will tomorrow’s power sector look like? How will it incentivise investment and ensure reliable supply, and what share of our total energy needs can ultimately be met by electricity? The 2018 WEO also examines the emissions intensities of different sources of oil and gas as well as what can be done to reduce them, and extends the Sustainable Development Scenario to include the linkages between energy and water. The WEO 2018 series features a special report on producer economies that explores how traditional oil and gas-exporting countries are adapting to a new price and policy environment, and what are the implications of longer-term structural changes in demand.
Oil and gas innovation
The World Energy Outlook 2018 examines future patterns of a changing global energy system at a time of increasing uncertainties and finds that major transformations are underway for the global energy sector, from growing electrification to the expansion of renewables, upheavals in oil production and globalisation of natural gas markets. Across all regions and fuels, policy choices made by governments will determine the shape of the energy system of the future.
WEO 2018 details global energy trends and what possible impact they will have on supply and demand, carbon emissions, air pollution, and energy access. Its scenario-based analysis outlines different possible futures for the energy system, contrasting the path taken by current and planned policies with those that can meet long-term climate goals under the Paris Agreement, reduce air pollution, and ensure universal energy access.
Major transformations are underway for the global energy sector, from growing electrification to the expansion of renewables, upheavals in oil production and globalization of natural gas markets. Across all regions and fuels, policy choices made by governments will determine the shape of the energy system of the future.
At a time when geopolitical factors are exerting new and complex influences on energy markets, underscoring the critical importance of energy security, the World Energy Outlook 2018, the International Energy Agency’s flagship publication, details global energy trends and what possible impact they will have on supply and demand, carbon emissions, air pollution, and energy access.
The WEO’s scenario-based analysis outlines different possible futures for the energy system across all fuels and technologies. It offers a contrast with different pathways, based on current and planned policies, and those that can meet long-term climate goals under the Paris Agreement, reduce air pollution, and ensure universal energy access.